For Russia, The Path To Laos Runs Through Vietnam

Southeast Asia is one of the economic powerhouses of the world, and its prized position in the global economy is only expected to grow in the coming future. This is why all the Great Powers are racing to (re)develop and reinforce their ties with the region, Russia being foremost among them. Ever since the onset of the New Cold War, Russia has been compelled to rapidly reorient its strategic focus eastward after witnessing firsthand how flimsy its friendship with the West really was. While most commentators rightfully draw attention to Russia’s growing full-spectrum relations with China , many of them neglect the fact that the country isn’t its sole partner or interest in the Asia-Pacific. Vietnam also forms a key lynchpin of Russia’s strategy there, and it’s through adroitly managing its social assets in the country that Russia can make its presence felt in the heartland of mainland ASEAN, Laos.

Land-Linking Laos

The author wrote an in-depth expose back in April about the strategic importance of Laos in forming the principal conduit of China’s ASEAN Silk Road , and the analysis holds just as firm today as it did then. The centrally positioned country connects to all the other mainland members of ASEAN and accordingly provides Beijing with an opening to extend its influence throughout the rest of the region. Not only is the country becoming land-linked through its pivotal transit relationship with China, however, but it’s also capitalizing on its historical ties with Vietnam to draw in trade and investment from the east. In fact, Vientiane and Hanoi just signed a border trade agreement at the end of last month stipulating that “import tax rates for goods made in Vietnam and Laos, as well as various products made by Vietnamese investors in Laos, will be reduced to zero.” What this basically means is that tariffs will be eliminated between both countries and a de-facto free trade zone will take its place. This is extremely beneficial for both parties, but interestingly also opens up some exciting opportunities that Russia and the Eurasian Economic Union could utilize in the coming future.

Russia’s ASEAN Pivot

In order to fully understand how Vietnam and Laos’ de-facto forthcoming free trade agreement can directly benefit Russia and appreciate the way in which this serendipitously came to be, a concise review of the country’s ASEAN pivot needs to be commenced first:

Vietnam:

Moscow has had privileged ties with Hanoi ever since the US War on Vietnam, and despite undergoing a rough patch of relative neglect during the 1990s, they still remained among Russia’s strongest post-Cold War relationships (alongside the one with Syria ). The reason that bilateral ties managed to survive that troubling decade is because of the tourism and arms trade sectors that continued to thrive during the period, and correspondingly formed the basis for exploring the expansion of trade links even further in the past years. The result of this has been the signing of the Vietnam-Eurasian Union free trade agreement that symbolically (and substantially) shows that Russia’s Asian Pivot is about more than just China, and that Moscow has intentions to establish a more robust presence in ASEAN.

Thailand:

After Vietnam, ties with Thailand have also been on the upswing, especially since the change of government last year that swept Yingluck Shinawatra out of power. Prayut Chan-o-cha, the new leader of Thailand, has been much more pragmatic than his predecessor and exceptionally more eager to diversify his country’s partnerships. During Prime Minister Medvedev’s visit to the country in April, the two spoke about the possibility of a free trade agreement between the Southeast Asian state and the Eurasian Union, which set the stage for Trade and Industry Minister Denis Manturov’s recent announcement that Thailand’s formal application for such is expected to be submitted by year’s end. Taken together with the agreement already concluded with Vietnam, Russia would then be in a free trade area with the two largest mainland ASEAN economies and become anchored to Indochina’s most economically productive coastland areas.

Myanmar:

Somewhat unexpectedly to some, Russia signaled at the Saint Petersburg International Economic Forum in June that it plans to become a major actor in Myanmar, signing a nuclear energy cooperation agreement with the country and even giving its Vice President the honor of presenting a keynote plenary speech alongside President Putin. More than likely, the country’s role has been elevated in the view of Russian diplomacy due to its enormous economic potential (despite the astounding political risks ), and it’s probable that Moscow envisions adding Naypyidaw to its list of free trade partners sometime in the future. If this comes to pass, alongside the clinching of a free trade agreement with Thailand, then it’s very probable that Russia could attempt to seal a free trade deal with all of ASEAN, or at the very least, the last two remaining mainland states, Cambodia and Laos.

* * *

Doing so with Cambodia wouldn’t be that difficult, since China’s entrenched interests in the new SCO dialogue partner and its implicit global cooperation with Moscow via the Russian-Chinese Strategic Partnership would see to it that Phnom Penh takes the natural and swift decision in this direction when the appropriate time arrives. As regards Laos, it will be described in the next section how the country is about to be in a quasi-free trade zone with Russia, whether or not this is even recognized at the moment by either side. To sum it all up beforehand, though, the reader should understand that Russia’s ultimate goal in ASEAN is to enter into a bloc-to-bloc free trade area between it and the Eurasian Union, which would then see the employment of China’s land and maritime Silk Road networks to facilitate the transit of goods between both sides. Under this vision, all sides stand to achieve major benefits, and as for Russia, one of the principal ones would be the extension of its Eurasian reach to the furthest extremity points of the supercontinent.

Getting Lucky In Laos

Having acquired a brief understanding of Russia’s grand strategy towards ASEAN, it’s now possible for the reader to adequately follow how Russia’s forthcoming quasi-free trade zone with Laos came to be. Vietnam, as it was initially mentioned, signed a border trade agreement with its neighbor that will essentially create a free trade zone between the two, and specifically give certain privileges to Vietnamese investors in Laos. At the same time, however, it was also noted how Vietnam just recently entered into a formal free trade agreement with the Eurasian Union. Connecting the threads, and considering the presence of certain strategic Russian business interests in Vietnam (most notably in this case, the tourism sector, which will be expanded upon soon), it’s conceivable to suggest that Vietnamese-based Russian businesses will be granted the same privileges in Laos as their ethnic Vietnamese counterparts in the country, the effect of which would be to open up a semi-official (albeit limited) free trade zone between Laos and Russia (or theoretically any of the other Eurasian Union member states) that transits through Vietnam.

The implications pertaining to this realization are huge, since it means that Russia can gain a strategic foothold in Laos via the overlapping free trade agreements. On the surface, mainland Southeast Asia’s least populous and most undeveloped country doesn’t seem like much of an economic opportunity for anyone, but upon closer examination (as was discussed in an earlier-cited piece ), there’s a wealth of untapped mineral and other natural resources there, to say nothing of the logistics edge that the country will have in being the pivotal connector between the Chinese and Thai components of the ASEAN Silk Road. The country also plans to amend its Constitution shortly in order to make it more business-friendly, meaning that if Vietnamese-based Russian companies can be ‘grandfathered’ into the legislation, then they’d be in a prime advantage vis-à-vis their competitors. The thing, is however, that Russia’s lost a lot of its soft power and overall influence in the country since the heyday of the Soviet era , meaning that it’s currently not in the best position to flex its economic muscle there, no matter the legal loopholes that presently work to its advantage or the constitutional urgency in doing so as soon as possible.

An innovative solution does present itself, however, and that’s the utilization of Russia’s established tourism industry network in Vietnam to serve as the vanguard for penetrating the Laotian market. Individuals employed in this field obviously have some degree of knowledge of the Vietnamese language (which is a given if they’re locals), and therein lies the first step in facilitating the return of Russian influence into Laos. According to official statistics released from February of this year, around 25% of the more than 4 million tourists that visited Laos last year were from Vietnam, and seeing as how the two languages are dissimilar, it’s reasonable to conclude that a sizeable segment of the Laotian population speaks Vietnamese to a working capacity. This means that the Vietnamese-speaking employees of Vietnam-based Russian companies can engage in market assessment operations to ascertain the social, material, and investment needs of the country, which would give their bosses valuable economic knowledge that they could either profit from themselves in diversifying their business portfolios or sell to other Russian companies interested in making inroads there. Even if Russian companies aren’t aware of or totally interested in Laos just yet, the discussion to start direct or charter flights between the two countries could make this investment (and tourist) destination much more attractive and convenient in the near future, so it’s therefore in the best interest of any Russian-owned entrepreneurial company in Vietnam to take the lead in this before others catch on.

Concluding Thoughts

All in all, Russia needs to be aware of the manner in which it can apply its already existing Vietnamese-based tourist industry in advancing strategic objectives in Laos. The promotion of robust business interests in the land-linked country (be they tourist, mineral, or other) via the exploitation of the overlapping free trade legislations centered on Vietnam can further Moscow’s ultimate goal of formalizing a free trade agreement with Laos and using such a development as a launching pad for promoting a pan-regional free trade area sometime in the future. As a result of such a lucky legal arrangement, Russia has a sizeable opportunity to deepen, as well as accelerate, its Pivot to ASEAN, but it must use its presently available human capital in Vietnam to bring this about. Russian-owned tourist companies in the country have the valuable language skills needed to communicate with Laotians (a significant portion of whom speak Vietnamese for historical and practical reasons), so they can form the vanguard in spearheading renewed Russian investment in the country, either through their own market discoveries or by selling such information to interested compatriots. Looked at from this perspective, Russia does in fact have a realistic possibility of expanding its economic interests into Laos, provided of course that it can harness the motivational will to take the initiative in the first place.

The Essential Saker II: Civilizational Choices and Geopolitics / The Russian challenge to the hegemony of the AngloZionist Empire

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40 Comments

Talking about Syria, Saw that the exceptional war president has now openly admitted to start bombing Syrian government forces. And you have americans running around fowl mouthed about their liberties and rule of law and other nonsense.

mmiriww, you are correct. This is a Guns of August war starter, while everyone, at least in Europe is away at the beach for the month.

Check this out:

Historian Stephen R. Weissman, writing in an Aug. 2 op-ed in U.S. military newspaper Stars & Stripes, argues that in fact, the Obama Administration is following a pattern that was first set in the Gulf of Tonkin incident in 1964 when President Lyndon Johnson deceived the American public about the presence of U.S. military forces in Southeast Asia. The result was war that devastated Vietnam, the U.S. military and U.S. foreign relations. That pattern, however, has continued ever since.

Weissman particularly points out the U.S./NATO attack on Libya in 2011, which was promoted as protection of civilians, but was really about regime change.

“Indications are that the problem of deceptive military missions persists today as the U.S. expands its military presence in the Middle East to confront violent jihadis,” writes Weissman.
What began as a program to train armed opponents of the Assad government has morphed into a program to target ISIS. U.S. officials were then hinting that they might extend U.S. involvement to include “protection” of the forces the U.S. is training as they integrate with existing rebel groups in Syria.
“Such scenarios could bring America into direct conflict with Syrian government forces,” Weissman writes.
Further potential expansion comes with the discussions of establishing a safe zone inside Syria along the Turkish border.
“What appears then to be a stealthy expansion of the anti-Islamic State ‘train-and-equip’ mission could have major consequences for U.S. policy in the Middle East, which the administration has not discussed publicly,” Weissman writes. “An increased U.S. military commitment to anti-Assad rebels on the ground could produce military responses by Syria’s allies — Iran, Hezbollah and Russia.”
Indeed, Moscow, Monday, warned that U.S. attacks on Syrian troops will only further destabilize the situation. Moscow has
“repeatedly underlined that help to the Syrian opposition, moreover financial and technical assistance, leads to further destabilization of the situation in the country,”
Kremlin press secretary Dmitry Peskov said, adding that IS terrorists may take advantage of this situation.

And the Obama Administration, Weissman notes, is doing all of this without a plan for bringing the war to a satisfactory conclusion and without consulting with or authorization from the U.S. Congress.
“These are the very consequences that the public feared when it demanded that Congress pull the plug on the administration’s plan to bomb Syria in September 2013,” Weissman concludes. “During this Presidential election year, voters need to communicate to the candidates that they will hold them accountable for telling the truth about the purposes of American military missions and their potential consequences.”

Probably true that she may never come clean, but all the more reason to pressure her more and more and more until her eyes pop out from the build up of flagrant internal treason and grovelling before the blackmailer, Obomber. Only great pressure, such as grasping that this submissive grovelling and failure to bring NerObomber down may get her killed in a world war, may finally prompt a useful act by this pathetic, compromised woman.

Russian Government need to emphasize that if Syria lost ISIS, Russia will be next in line with high light of the section of map. Any talk of Russian would withholding helping Assad should be shot down right away.

Vietnam is playing the West’s game, too. It is part of the group joining TPP.
The antipathy Vietnam still holds versus China drives Hanoi toward the US.
The enormous wealth the leadership has accrued has altered it from its historic ideology.
So it has a zigzag foreign policy. It allows Russia to port planes and ships at Cam Rahn Bay facilities while it courts US hegemonic interference in the Paracel and Spratly Islands issues.

Thailand is doing important deals with China (most were begun with the prior government before the military coup). The rail connections with China will be a huge connective asset. China also has dreams of a cross Thailand canal to avoid the chokepoint controlled by the US at the Straits of Malacca. If that gets done, the Maritime Silk Belt will be a true express route from the South China Sea area to the Indian Ocean via Andaman Sea or Gulf of Bengal.

The prize right now seems to be Myanmar. It is in a tug-of-war between China and the US. Starting and stopping of various development projects (variously encouraged and discouraged by US) makes it hard to predict what the future will bring.

All these SE Asian countries have been part of the US manipulation since the fifties. Many have long-standing drug industry which the CIA co-ventured. And most of the militaries are US-controlled and influenced.

Just look at the horrors Malaysia is undergoing with missing and shot down airliners. All because they stepped out of line and challenged the Hegemon. It was an object lesson for the other small nations of SE Asia.

Maybe Russia will help give them more spine. But the area is geopolitical quicksand. It is ironic that they fear China’s size yet embrace the Hegemon’s domination.

Its possible to “correct” in the present “historical mistakes”,though the World shows it seldom happens.But its not possible to correct the “original” mistake.That is in the past and beyond undoing.In this “particular” case,those countries were co-opted in the 1950′-60’s,by the US.It is certainly possible if done correctly to undo some of the damage.But its a hard go,to do it.In my opinion Russia and China should concentrate on the countries least corrupted.That had good relationships in the past with them.And only then work on bringing in the ones with a history of siding with the US. They’ve had generations of leaders that sold themselves to the Empire.And those still have networks of Empire loyalists throughout the systems in those countries.

I’m still looking for verification on the Net, but the simple fact of a “2 hour conversation” between Putin and the turkish ambassador may give us a clou about the seriousness of this recent talk.

We should not forget, that Turkey just allowed the build up of a “ukrainian muslim brigade” just at the doorsteps of the Krim with the active involvement of the Tartar-CIA connection and that he just “delayed” the turkish-stream project for ayear. The ISIS bombing lie of Erdogan, the unlawful establishment of a no fly zone in northern Syria and the expected US bombing of Syrian forces might have triggered the harsh words of Putin towards Turkey.

Sorry for this “intervention” Saker, but this might be really serious and should be mentioned.

While I don’t doubt that Putin would “love” to have said that (I know I would).If you look at his career,you will find he isn’t the kind of leader that does that.The West is intent on “demonizing” him in the Hitler image.And as we all know Hitler was notorious for throwing “fits” and screaming at people.So by portraying Putin like that it fits the Western propaganda image.I am 99.9% sure its a false story (if anybody would have long ago got screamed at, if Putin was like that, would be Poroshenko).He might (hopefully) have advised Turkey that it was a bad idea to support ISIS,but a tirade,isn’t Putin’s MO.

To address your point, the word “exploitation” was only used once in the following passage from the article:

“The promotion of robust business interests in the land-linked country (be they tourist, mineral, or other) via the exploitation of the overlapping free trade legislations centered on Vietnam can further Moscow’s ultimate goal of formalizing a free trade agreement with Laos and using such a development as a launching pad for promoting a pan-regional free trade area sometime in the future.”

It was chosen because it most succinctly describes what Russia would be doing by taking advantage of the legal economic loophole between the Eurasian Union-Vietnam and Vietnam-Laos.

Vietnam seems to be keeping in with all sides at the moment (agreed an EU free trade deal today) – so not sure which way they will go…. Laos will be an interesting point of focus. It will be interesting to see which way the wind blows – I hope towards the Eurassian belt/silk road and a multi-polar world.

“While all eyes looked to the horror of the Vietnam War. symbolizing since the bloody US military arts throughout its history, the CIA developed a secret operation in neighboring Laos, which consisted simply of perpetrating the biggest bombardment of history, with the particularity that it was a neutral country, that even though the threat of communist infiltration was not at war with the United States.(….)

I found this article very focused on the use by any country with money and growing infrastructure necessary, in this case Russia, of the resources and potential business areas of a country among the poorest and punished in the Earth and throughout history, such as Laos. So, a very liberal and colonialist approach. I have to admit I have not read every article of Mr. Korybko, and I’m not sure of his political orientation, but this, no doubt, did not like me.

What I disliked the most is that the article is focused only in the economic and strategic interests of Russia and some of its entrepreneurs, especially those dedicated to tourism and mineral extraction, but I see no suggestion anywhere in the interest of the sovereign nation of Laos and its citizens, the majority, as elsewhere, I suppose, workers.

With regard to the interests of the sovereign nation that bears the name of Laos now, I’m surprised that the author points to the “need to amend the Constitution to promote a better business climate for Russian businessmen”. I wonder where Mr. Korybko was formed, but seems to have learned well neoliberal tactics already employed in Latin America, and even now, in southern Europe, to amend the Constitutions of sovereign countries, by night and treachery, to the glory of the ruling plundering oligarchy.

The Constitution of Laos, Mr Korybko, should only be changed by popular referendum and if the needs of the nation now known as Laos and / or its citizenship so require in order to improve the living conditions of the majority, but never for profit of a few, and besides, foreigners.

Then there is the defense of the free trade agreements, which, to my knowledge, in my vast ignorance of economic issues, has never been for improvement in the living conditions of workers and the general public, but for large companies increase their rate of profit by paying less tax, more easily exploited and laying off workers and, above all, facilitating never having to face justice and that their debts, if business goes bad, will pass to become public debt. To read this, when here in Southern Europe we are in full combat against TTIP, it makes squeak my senses, Mr. Korybko.

It is assumed that in this blog we are presenting Russia as a civilizational and moral alternative to imperialism, colonialism, plunder, bravado, arrogance and moral misery of the USA and the West. To go to do the same thing they have been doing for centuries to other peoples, being in a hurry to take over the business and natural resources available before others can arrive, and that the people continue having a miserable life, for this trip, Mr. Korybko, look, as we say here, so I did not need so many saddlebags.

When I read thoughts / tips like these, frankly, I left with the same face as they should have left Novorossiyans, as should have left the much loved Mozgovoi. It is that one, left the skin struggling against all the evil forces united and rabid, and then, suddenly, the things are changed by others, and what one dreamed of, when left everything to take up arms and takes more than a year watching friends, family and neighbors dying, returns to be where always was, in the trunk of impossible dreams.

This way, of course, we are not going to change the world, and it seems to me that must change, a lot indeed. I fight for that, Mr. Korybko. If Russia is in my same trench, it’s great, I love Russia and the Russians, but what I do not want for me, I do not want for others, even if they live so far away as in Laos.

Thanks for your comments. I don’t respond to polemics but I’ll briefly address some of the substantiated concerns that you raised:

(1) The Eurasian Union is a free trade entity that seeks similar arrangements with partner states/entities, and the proposal to accelerate Russian/Eurasian Union-Laotian trade is to further the larger goal of a Eurasian Union-ASEAN free trade area. I’m familiar with the costs and benefits of such arrangements, but one can objectively see that both entities (Eurasian Union and ASEAN) are making the sovereign choice to move towards free trade agreements with other actors, so in the interests of promoting Russia’s multipolar policy, I see it to be in the greater good that a similar agreement is clinched between the two.

(2) Right now Laos is in the process of positioning itself as the central conduit for China-ASEAN trade, which should provide its several million people with fantastic opportunities for their own benefit. Bringing Russia into the mix, given its political will to pivot to Asia, should add to this even more. Tourism and mineral extraction are just the starting points for getting Russia involved in restoring its Soviet-era relations with the country, and it’s expected these industries will serve as a launching pad for more robust economic interaction further down the line.

(3) Per your comments on the Laotian Constitution, if you would have clicked on the accompaning hyperlink, you’d see that this initiative was entirely indigenous and promoted by the country’s communist government for the reasons of facilitating twenty-first century business needs. It is not the author’s nor Russia’s proposal whatsoever.

Thank you very much for your clarifications, regarding points 1 and 2 I stay calmer.

With regard to point 3, I have to confess that I have not clicked on the hyperlinks because I read your article last night, very late, once finished a usual work I do in those hours, and besides, I had taken a muscle relaxant, while I am in a recovery process of a very painful elbow fracture and ii is not possible to sleep still otherwise.

Given all this, I have perhaps misunderstood what you referred to this point, but, even if it was an initiative of the indigenous Communist party, continues to be a violation of the interests and sovereignty of the people whom they represent, even if done with the best of intentions. The Communist parties, from wherever they were, as has been shown throughout history, and like most human beings, they sometimes are wrong, and sometimes, besides, irreparably.
I do not think that Russia, which claims to be defending national sovereignty and respect for national and international legislation, should endorse such initiatives.

On the other hand, reform the Constitution to open the doors of the Laosian nation to the “free market” has nothing of communist. We should also bear in mind that often, if not always, the Communist parties have been infiltrated by 5th columnists trying to blow up any road to communism. Khrushchev, Gorbachev and Yeltsin also belonged to the Communist Party.

Finally, although you do not clarify me your political affiliation, it is your right ( but I see that you have been formed in the USA ), I will clarify you that, in my case, I am a communist more by heart than of party discipline.

When I read the title, I wanted to laugh. Vietnam to the smaller indo-china countries is as Russia to its neighbors. VietNam still holding Cambodia’s two provinces. Every once a while Vietnam get into conflict with some one.

This is a good commentary but it overestimates the ability of different Indo-China countries to mutually communicate. Each country’s language is so different from that of it’s neighbor (except Lao and Thai) , that they often find themselves using simple English.

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